The USDA report released Thursday was highly anticipated and followed by market watchers world-wide, with primary focus on the major crops which include corn, soybeans and wheat. Here is a look at data released on some of the lesser-followed crops that can also impact Canadian producers.
Durum stocks as of March 1 totaled 42.4 million bushels. This is 18.4% above March 1, 2012 and just marginally higher than the average 41.04 mbu held on this date over the past five years. North Dakota's on-farm stocks were reported at 16 mbu, which is 2.500 mbu higher than the same date last year. (Note 1 mbu = 27,215 bushels) Given the World Agriculture Supply and Demand Estimates (WASDE) report earlier this month which indicated the year's carryout at 35 mbu, this would imply only 7.4 mbu disappearance or usage in the final three months of the durum crop year, which is 52% below the five-year average for durum disappearance in the last quarter of 15.5 mbu. Also, the 35 mbu carryout projected for this crop year would be 36.7% above five-year average of 25.6 mbu, according to USDA data.
From a Canadian grower's perspective, the bright news with regards to the durum market was found in the Prospective Plantings report. Durum acres in the U.S. were forecast at 1.75 million acres, which is 18% below both last year's acreage and the pre-report trade estimates. It's also 22.7% below the average seeded acreage over the past five years. This acreage would be the second lowest acreage in the past 50 years, and only the third time that U.S. acreage has fallen below 2 million acres in that same 50-year time frame.
Barley stocks as of March 1 were announced at 116.3 mbu, which is 24% higher than last year on the same date and 7.5% below the five-year average. WASDE's estimated carry-out from earlier this month was released at 77 mbu, which is higher than last year's 60 mbu, while 8.6% below the five-year average at 84.2 mbu. Given March data released, disappearance in the last quarter of the year would total 39.3 mbu, which is 5.4% below the five-year disappearance for this quarter.
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Barley acreage reported in the U.S. is 3.634 million acres. This is very similar to last year's planted acreage and 7.6% higher than the five-year average. Like in Canada, U.S. barley acres have been in a long-term decline. In fact, the USDA reports this acreage as the fifth smallest on record. Barley acres in the U.S. averaged 10.6 million in the 1980s, 7.2 million acres in the 1990's, 4.5 million in 2000-2009, while in the first three years of this decade, have averaged 3 million acres per year. The states of Montana and North Dakota seeded 54% of the acres last year, while the current forecast indicates the same split this year.
March 1 oat stocks were announced at 52.5 million bushels, which is 29.7% below March of 2012 and 39% below the average of the March 1 stocks over the past five years. Earlier this month, the WASDE report forecast the 2012/13 carryout for oats at 42 million bushels, which is the smallest carry-out on the USDA Yearbook records in the past 37 years (USDA Yearbook records go back to the 1975/76 crop year).
In order to land at a 42 mbu carryout, this would imply a fourth quarter usage of 10.6 mb, which would compare to the fourth quarter usage of 18.7 mbu averaged over the past 3 years and the 5-year average at 15.9 mbu. Usage in the last quarter will either be sharply lower than previous years or the ending stocks figure for this year will be pushed much lower than the current forecast.
These are uncharted waters for oat stocks and bound to be supportive for the market and Canadian exports. Yearbook data for the late 1970's show U.S. oat carryout as high as 313 mbu, with stocks eroding each decade since.
The Prospective Planting report showed oat acres recovering slightly in 2013, at 2.9 million acres as compared to 2.8 million acres in 2012. Still, the USDA reports this as the third lowest on record. The average over the past five years is 3 million acres, so it does appear that acreage has reached its lows.
Canola acreage in the U.S. is estimated to be 1.65 million acres, which is down 6.3% from 2012/13 although higher than the five-year average which is at 1.22 million acres. The biggest loss is forecast to be in North Dakota, which planted 83% of the acres in 2012 and is forecast to reduce their acreage by 15.8% in 2013. This comes at a time when the U.S. canola crush is expanding, as it is in Canada. The Northstar Agri Industries plant in Hallock, Minn. began operations in May 2012 at 1000 tons/day, while has made applications to double capacity to 2,000 tons. While half of its supplies come from the U.S., mainly North Dakota, the other half is sourced from Canada. Any tightening in U.S. supplies will place more pressure on the need to source from Canada.
Another plant which has recently fired up operations in the U.S. is Pacific Coast Canola, in Warden, Wash.. This plant began operations in December, 2012 and is focused on crushing 1,100 metric tonnes/day. As seen in Canada, canola acres in the U.S. may be facing a slight decline at a time when domestic crush is expanding, which will create more demand on both sides of the border.
Dry pea acres in the U.S. are estimated to remain on a path of sharp growth. Given that approximately 70% of U.S. production is destined for export markets, this heightens competition for Canadian production. Acres were forecast to grow 31% to 850,000 acres, after growing 79% in 2012 from the previous year. This is a recovery in acres back to those seen in the 2005 to 2010 time from, while 21% above the average of the last five years. The largest growth is in the northern States in North Dakota and Montana.
Fortunately for lentil markets, the USDA is forecasting lentil acres in the four States that are monitored to fall in 2013. Acres are forecast to fall 28% to 335,000 acres. U.S. acres are 49% below their high of 658,000 acres in 2010 and below the five-year average of 447,000. This fall in acres is also joined by a lower acreage in Canada which adds to the need to bring North American stocks into more manageable levels.
Cliff Jamieson can be reached at email@example.com
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